Cree (CREE) Q2 Solid, But Guidance Seasonally Soft - Needham & Company

January 22, 2014 7:28 AM EST Send to a Friend
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Price: $36.60 -0.38%

Rating Summary:
    8 Buy, 27 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 3 | Down: 17 | New: 2
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Needham & Company analyst Y. Edwin Mok reiterated a Hold rating on Cree (NASDAQ: CREE) following "good" Q2 results but seasonally soft guidance.

"Cree delivered a strong F2Q14 report but provided seasonally softer guidance that is below consensus," Mok comments. "Given the strong secular trend coupled with its momentum in light bulbs and fixtures, we have no reason to believe Cree will not deliver another year of strong growth. On the other hand, capacity constraints are limiting sales of higher-margin LED components, and we believe a mix shift toward more bulbs will continue to prevent gross margin expansion in the next few quarters. We are incrementally more constructive on Cree based on its strong business momentum in LED lighting, but view the stock as fairly valued trading at a CY15E P/E of 29x."

The firm bumped FY 2014 EPS from $1.60 to $1.66 and FY 2014 EPS moves from $2.15 to $2.07.

For an analyst ratings summary and ratings history on Cree click here. For more ratings news on Cree click here.

Shares of Cree closed at $62.83 yesterday.


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